GOLDMAN 2

see main Goldman Sachs for older content 4/16

gs tag

still in amazon despite PR BS?

https://www.alternet.org/kyrsten-sinema-and-joe-manchin/

no lnx

Kyrsten Sinema and Joe Manchin awash in corporate cash as small donors flee: report

WASHINGTON, DC - JULY 28: (L-R) U.S. Sen. Joe Manchin (D-WV) speaks as Sen. Susan Collins (R-ME), Sen. Kyrsten Sinema (D-AZ), Sen. Jeanne Shaheen (D-NH) and Sen. Mark Warner (D-VA) listen during a news conference after a procedural vote for the bipartisan infrastructure framework at Dirksen Senate Office Building July 28, 2021 on Capitol Hill in Washington, DC. The Senate has advanced the bipartisan infrastructure framework with the vote of 67-32. (Photo by Alex Wong/Getty Images).

Brandon Gage April 19, 2023

United States Senators Joe Manchin (D-West Virginia) and Kyrsten Sinema (I-Arizona) are both up for reelection in 2024. But their ongoing clashes with the Democratic Party are souring voters from contributing to their respective campaigns,  The Wall Street Journal reported on Wednesday.

:{

}:

Manchin, a conservative Democrat who often caucuses with Republicans, and Sinema, who became an Independent last December, "each raised less than 1% of their campaign money between Jan. 1 and March 31 from donors who gave $200 or less. Those are among the lowest percentages in the Senate—and well below their previous grassroots fundraising levels, Federal Election Commission filings show," the paper explained. "In the same quarter four years ago, small donors made up about 18% of Ms. Sinema's campaign contributions and accounted for almost 5% of Mr. Manchin's finances."

Although neither politician is actively engaged in a campaign, Manchin has yet to declare his intent to hold onto his seat. Instead, Manchin has made a number of media appearances teasing a run for president.

READ MORE: 'Can't I be a moderate centrist?' Joe Manchin refuses to commit to a party if he runs for president

At stake, though, is the razor-thin majority that Democrats have in the Senate and thus President Joe Biden's capacity to enact his agenda (presuming that he is reelected).

"Democrats and the three independents who vote with them now hold 51 seats to the Republicans' 49. Next year, 33 seats are up for election, 23 of them now held by Democrats and the aligned independents," noted the Journal. "The map includes contests in such Republican-leaning states as Ohio and Montana. Arizona and especially West Virginia also could elect Republican senators."

Donors and their money, meanwhile, are actively seeking new investments.

:{

}:

"Ms. Sinema has raised a little over $2 million this year, with most of the money coming from donors who gave more than $200. Arizona Rep. Ruben Gallego, a Democrat challenging Ms. Sinema's re-election, has collected almost $3.8 million, more than half from donors giving $200 or less, campaign filings show," the Journal pointed out. "Mr. Manchin's campaign reported raising about $371,000 so far this year. In the comparable fundraising quarter six years ago—when he was last beginning an election cycle—he raised about $556,000."

READ MORE: GOP billionaire donor who funded Clarence Thomas’ lavish lifestyle also donated heavily to Sinema, Manchin

One glaring issue for Sinema and Manchin is where their donations are coming from geographically.

"With grassroots fundraising flagging, Ms. Sinema and Mr. Manchin are more reliant upon major donors and political-action committees, which tend to give only once at the maximum level," according to the Journal. "Ms. Sinema and Mr. Manchin share roughly 700 of the same individual and PAC donors who gave at least $200, a Wall Street Journal analysis of their campaign finance reports found. The analysis covered January 2019, when Ms. Sinema took office as a senator, through the end of last month. The overlap represents a fraction of their donors—Ms. Sinema's campaign alone has had more than 25,000 contributors in that time—but they share some characteristics. Almost all hail from states other than Arizona and West Virginia, and many have tended to give more heavily to Republicans than Democrats."

Another potentially problematic development is that Sinema and Manchin rely heavily on corporate cash.

"Financial industry, pharmaceutical, energy and real-estate PACs gave to both senators. The PACs for SpaceX, Elon Musk's space transportation company, and Goldman Sachs Group Inc. are among their shared corporate donors," added the Journal. "More than a dozen of their mutual donors also have ties to the group No Labels, which is backed by financial-industry leaders and is supportive of centrist politicians."

View the Journal's full report here (subscription required).

FROM YOUR SITE ARTICLES

Is Kyrsten Sinema becoming the Joe Manchin of the West? ›

McConnell 'prays' for Manchin and Sinema to help him defeat Biden ›

Manchin, Sinema chase after Republican mega-donors and betray their impoverished states ›

RELATED ARTICLES AROUND THE WEB

Joe Manchin takes a jab at Kyrsten Sinema for reining in drug ... ›

Koch network urging Sens. Manchin, Sinema to oppose $739 billion ... ›

How Manchin and Sinema Completed a Conservative Vision - The ... ›

an comm dr 1 23

Both alarm and concern were expressed Saturday in response to new reporting about a charitable group with close ties to the U.S. Supreme Court that has been soliciting and accepting donations from corporate interests and far-right activists with cases before the Court.

The New York Times exposé focused on the activities and fundraising of the Supreme Court Historical Society, a nonprofit that claims its mission is "dedicated to the collection and preservation" of the Court's history.

While the group refused to disclose its donors to the Times, reporters from the newspaper determine that much of the funding came from powerful companies like Chevron, Goldman Sachs, Time Warner, and Facebook as well as anti-abortion activists like Rev. Rob Schenck.

According to the newspaper:

:{The society has raised more than $23 million over the last two decades. Because of its nonprofit status, it does not have to publicly disclose its donors—and declined when asked to do so. But The New York Times was able to identify the sources behind more than $10.7 million raised since 2003, the first year for which relevant records were available.

At least $6.4 million—or 60 percent—came from corporations, special interest groups, or lawyers and firms that argued cases before the court,}: according to an analysis of archived historical society newsletters and publicly available records that detail grants given to the society by foundations. Of that, at least $4.7 million came from individuals or entities in years when they had a pending interest in a federal court case on appeal or at the high court, records show.

In the case of Chevron, the oil giant actively gave to the society even as it had a pending climate litigation working its way through the court.

In response to the new revelations, public interest attorney Steven Donzinger, who was himself targeted by Chevron for his work aimed at holding the company to account for its polluting activities in Ecuador, said the implications were "horrifying."

"Why are these conflicts allowed?" asked Donzinger.

Others quoted by the Times said the effort by people like Rev. Schenck, who admits to using the charitable group as a way to get other anti-abortion activists closer to the justices, creates a clear conflict of interest.

Charles Fried, a Harvard Law professor who once served as solicitor general in the Reagan administration and counts himself a donor to the Historical Society, told the newspaper was so "horrified" by Schenck's behavior that he may no longer give.

"It's disgusting," Fried said. "Many of the people who contribute have the same reasons I do. You go to a cocktail party and support a good cause. But it turns out that for some people it's not that innocent."

While the Times notes that the Historical Society is "ostensibly independent of the judicial branch of government," the reality is that "the two are inextricably intertwined," with court justices serving as chair of the board and hosting gala events where exclusive access is reportedly part of the allure.

The left-leaning Citizens for Responsibility and Ethics in Washington (CREW) said the reporting raises "significant questions" about the group which has "raked in millions—a significant chunk of it from groups with cases before the Court" over the last two decades.

Fix the Court, which acts as a watchdog organization for the U.S. Supreme Court, said the justification for the Historical Society's existence just doesn't hold water.

and Gabe Roth, the group's executive director, told the Times that if money was an issue for funding such a project it would be the best solution—one free of ethical concerns—for Congress to simply appropriate the money needed to maintain the history of the Court.

both cia and stratfor had hedge fund?  wikileaks?

Muneer Satter, who built the world’s largest family of mezzanine funds at Goldman Sachs Group Inc., is leaving the bank after 24 years, according to two people familiar with his plans.

Satter, 50, is departing to spend more time with his familyafter commuting for the past 12 years from his home in Chicago to Goldman Sachs’s headquarters in New York, the people said, asking not to be named because his move hasn’t been announced publicly..

history

https://kpfa.org/episode/letters-and-politics-june-15-2020/

https://www.risingupwithsonali.com/2019/07/17/swindlers-all-a-brief-history-of-government-business-frauds-from-alexander-hamilton-to-aig/

MICHAEL POWELSON – Presidents throughout American history have enabled corporate excess even at the expense of public welfare. And yet they promise to uphold the Constitution and the rights of all Americans. Making the case that our economic and political system are inherently geared toward corruption, my next guest has written a history book about it.

Dr. Michael Powelson, teaches at LA Valley College and Cal State University Channel Islands. His new book is Swindlers All, a Brief History of Government Business Frauds from Alexander Hamilton to AIG.

could have bought GM for 3 bill$, instead gave 149b, cost us 11b never get back, Geitner; GS and AIG will never pay back

==

ew 12/19 arctic, others follow?

https://www.ecowatch.com/goldman-sachs-big-bank-divests-2641609193.html

==

https://www.alternet.org/2020/04/market-patriotism-returns-and-asks-workers-for-a-blood-sacrifice/

no lnx many

Market patriotism returns — and asks workers for a blood sacrifice

Written by Salon April 4, 2020

In the days after the September 11th attacks, President Bush, Mayor Giuliani and a variety of other politicians sought to soothe the ailing American psyche. They spoke publicly with a mixture of mourning and resolve. “Even grief recedes with time and grace,” Bush told the nation in his State of the Union speech.

Shortly thereafter, the nation’s leaders turned their efforts toward soothing the ailing American stock market. In a September 23, 2001 Washington Post column, former US Secretary of Labor Robert Reich noted the peculiarity of Vice President Dick Cheney’s plea for Americans to “stick their thumb in the eye of the terrorists and… not let what’s happened here in any way throw off their normal level of economic activity.” Reich dubbed this ideology “market patriotism”: the notion that “we demonstrate our resolve to the rest of the world by investing and consuming at least as much as we did before.” He noted the irony that during World War II, Americans had been asked to curb their consumption habits, but in 2001, “our patriotic duty seems to be to buy more and save less.”

Today, with the stock market once again devastated by a disaster, market patriotism is back. The social distancing rules prompted by the coronavirus pandemic have brought our economy to a standstill for two weeks now, and so the American consumer is once again being drafted into a rescue mission. President Trump briefly wanted the country “opened up and just raring to go by Easter,” despite the fact that lifting shelter-in-place and other social distancing measures would almost certainly contribute to hundreds of thousands of otherwise preventable deaths. Though Trump has more recently come to grips with the need to continue social distancing through April, it remains clear that the Right is still gearing up to send workers and consumers back into the fray before it is safe to do so.

Lloyd Blankfein, senior chairman of Goldman Sachs, tweeted that although efforts to flatten the curve are sensible “for a time,” “crushing the economy, jobs, and morale is also a health issue.” Texas Lieutenant Governor Dan Patrick said on FOX News that “as a senior citizen,” he was “willing to take a chance” on his own survival in exchange for getting Americans back to work and saving the economy for his children and grandchildren. And Glen Beck said that he “would rather die than kill the country.”

It is worth noting, of course, that Trump on his own cannot order anyone back to work—state governments, civil society, and business owners are the ones making most of these decisions. Nonetheless, if Trump and his ilk have their way, we’ll all go back to work — and back to shopping and spending and pumping dollars into an economy that badly needs the revenue, or at least, badly needs enough revenue to convince investors to pump up stock prices again. If that happens, millions of Americans will die, and the GOP appears increasingly to be okay with that.

The September 11th attacks killed 2,605 Americans. Since that day, we’ve been told again and again that avoiding another 9/11 justifies almost any expense. No military misadventure or domestic security scheme has been too extreme or too costly.One study from Brown University put the cost of our wars in Afghanistan, Iraq, Syria and Pakistan at over $6 trillion since 2001. All of this has been enacted in the name of 2,605 lives lost, and to resounding cries of “never again.”

As of April 1st, more Americans have already been lost to COVID-19 than died in the September 11th attacks. Yet many on the right Right have been cavalierly suggesting that the coronavirus has been overhyped because only two percent of those infected die from it. This was the claim made recently by Rush Limbaugh, though he did not acknowledge that such fatality rates would leave millions of Americans dead. After months of downplaying the threat posed by the virus, Trump himself is now saying that keeping the death toll below 100,000 would be “a very good job.” It seems unfathomable that the same country that so radically revamped its domestic security systems and that embarked on a doctrine of “preemptive war” around the world as a response to 2,605 American deaths could suddenly fail to care about the prospect of hundreds of thousands of American deaths (or more).

The simple answer is that our wars in Afghanistan, Iraq, and elsewhere were never about protecting Americans, as millions of protestors knew from the start. They were about oil. They were about a wounded sense of American innocence. They were about a kind of vengeance for America’s failure in Vietnam. They were about profiteering — disaster capitalism, as Naomi Klein has aptly diagnosed it. But they were not about protecting anyone.

The enormous stimulus bill, signed into law last week with the near-unanimous support of Republicans and Democrats in Congress, further illustrated these principles. Despite the fact that most reporting lists its price tag at a whopping $2 trillion, the real cost is likely to be closer to 6 trillion — the Federal Reserve is going to be able to lend an additional $4 trillion to major corporations, on top of the $500 billion or so in direct bailout funds that has been more widely reported on.

The effects of the bill will be devastating for workers, the middle class, and small businesses.According to critics like Matthew Stoller, this bill gives Wall Street the ability “to go shopping for businesses in trouble. We could see the mother of all roll-ups, as small and medium sized businesses desperately try to get whatever they can from deep-pocketed private equity investors and monopolists. If that happens, America could look like a very different country after this pandemic is over.”

And as David Dayen put it in The American Prospect, “this is a rubber-stamp on an unequal system that has brought terrible hardship to the majority of America. The people get a $1,200 means-tested payment and a little wage insurance for four months. Corporations get a transformative amount of play money to sustain their system and wipe out the competition.”

Market patriotism used to mean that average citizens were urged to keep spending during periods of uncertainty. Now it demands blood sacrifice. Our leaders want us back to work, getting sick, and if need be, dying to please the market. They want to throw us crumbs while further enabling the consolidation of the economy in the hands of an ever-smaller group of ever-larger corporations. Though the outsized influence of billionaires and big corporations was a source of heated discussion during the Democratic primaries, this bill is a triumph for the ultra-wealthy financiers who already control so much of American life.

In the end, Americans all know that we have suffered and sacrificed too much for the market already. It doesn’t have to be this way. Those who can continue to stay home must do so. But we must also stand in solidarity with those who don’t have a choice — we must refuse to order from Instacart and Amazon, whose workers are now on strike for better wages and working conditions, and support other labor actions in the future. We must do what we can to help each other, and to protect ourselves. Our leaders, and the market they serve, will certainly not protect us now. They never really have.

Timothy Recuber is an Assistant Professor of Sociology at Smith College, and the author of the book “Consuming Catastrophe: Mass Culture in America’s Decade of Disaster.” His work focuses on the mass media’s representation of death and disaster, and his research has been published in journals such as New Media & Society, the American Behavioral Scientist, Research Ethics, and Contexts. Find him on Twitter @timr100.

==

lip service bs? 1/20

Rabouin and Harder also note that “BlackRock, the world’s largest asset manager, says it’s making climate change a pillar of its investment strategy, and even Goldman Sachs and JPMorgan Chase are calling for a price on carbon emissions.”

==

HEAD OF SEC CLAYTON GS

aha, lessen power of one small aspect of democracy in cap'lism, structural incentive MAX profit [// Worster Dust Bowl maxims, extraction]

1219, CoC lobby

https://www.cnbc.com/2019/11/05/reuters-america-update-1-u-s-sec-proposes-rules-that-could-limit-shareholder-voices.html

Nov 5 (Reuters) - Wall Street’s top regulator on Tuesday proposed a pair of long-awaited rules that would set new limits on shareholders ability to call for corporate changes on thorny issues like climate change disclosures and executive compensation In one of the biggest wins for the corporate lobby under President Donald Trump, the U.S. Securities and Exchange Commission voted 3-2 along partisan lines to raise the re-submission thresholds for motions that shareholders file on company ballots and to put new requirements on firms guiding investors how to vote in corporate elections.

Both shareholder proposals and proxy advisory firms are cornerstones of corporate governance and how investors hold management accountable.

Both changes will be subject to public comment.

Democrats Rob Jackson and Allison Herren Lee voted against the rules, saying they tilted the playing field toward corporate management.

==

no lnx wapo

Democracy Dies in Darkness

Global Opinions

Disgrace in the desert: The shameless return of business and government leaders to Saudi Arabia

Treasury Secretary Steven Mnuchin during the Future Investment Initiative conference in Riyadh, Saudi Arabia, on Wednesday.  (Hamad I Mohammed/Reuters)

By Ali AlAhmed

October 31, 2019

Ali AlAhmed is founder and director of the Institute for Gulf Affairs.

This week, many of the world’s business and government leaders have convened in Riyadh, Saudi Arabia, for the 2019 Future Investment Initiative, the Saudi regime’s annual money fest to promote doing business with the kingdom. Instead of the romanticized moniker “Davos in the Desert,” it would be better to call it a “Disgrace in the Desert.”

Last year’s event was shunned by most leading financiers due to disgust over the shocking murder and dismemberment of Jamal Khashoggi, the Saudi-born critic and Post contributing columnist.

:{

}:

So, what has changed this year to entice President Trump’s son-in-law and senior adviser Jared Kushner, Treasury Secretary Steven Mnuchin and top executives of BlackRock, Blackstone and Goldman Sachs to show up?

:{

}:

Well, here’s what hasn’t changed: The CIA’s finding that Crown Prince Mohammed bin Salman, the kingdom’s effective ruler, was the one who ordered Khashoggi’s brutal execution in Istanbul. To date, none of those implicated has faced any serious punishment or accountability.

What has also not changed: Saudi Arabia remains not only a rogue state by most international standards — it also makes an unstable strategic partner for the United States and others, fundamentally incompatible with Western business practices. The entire kingdom is now controlled by a ruthless 30-something whose first instinct is to imprison, torture, expropriate and murder.

==

https://www.**newsweek.com/2017**/12/29/donald-trump-russia-secret-deutsche-bank-753780.html

no lnx many

It sounded like an exhausted parent scolding a tantrum-prone toddler with a penchant for tossing toys from his stroller.In November 2008, Steven Molo, an attorney for Deutsche Bank, wrote a letter to the Supreme Court of New York about one of the company's most troublesome clients. At issue was $640 million that client had borrowed in 2005 to fund construction of a new hotel in Chicago. The client had personally guaranteed the loan, but a few years later, the Great Recession devastated the economy, and he defaulted on his payment, with $330 million outstanding. Deutsche was seeking an immediate $40 million from the client, plus interest, legal fees and costs.The debtor in question: Donald Trump, the future president of the United States.Instead of paying up, the New York real estate mogul countersued, claiming the 2008 crash was a force majeure event—one that Deutsche had helped precipitate. Therefore, he argued, he wasn't obliged to pay back the money. Instead, he claimed Deutsche owed him money—about $3 billion in damages.In response, Molo drew up a withering document, contrasting Trump's frivolous writ with his long career of boasting about how rich he was:

Trump proclaims himself "the archetypal businessman, a deal-maker without peer." Trump has stated in court he is worth billions of dollars. In addition to substantial cash, personal investments and various other tangible assets, he maintains substantial interests in numerous extraordinary properties in New York and around the country.Those assets included hotel projects in seven U.S. cities, as well as in Mexico, the Dominican Republic, Canada, Panama and Dubai, United Arab Emirates, the lawyer noted. There were also casinos and golf courses scattered all over the world.The same day Trump argued that the Great Recession meant he didn't need to pay back his debts, he gave an interview to The Scotsman newspaper. After a two-year fight, he had gotten approval from the Scottish government for a new resort near Balmedie in Aberdeenshire—and he was thrilled. "The world has changed financially, and the banks are all in such trouble," he told the paper, "but the good news is that we are doing very well as a company, and we are in a very, very strong cash position." Trump said he didn't have any exposure to the stock market, had bought the Scottish land for cash and was now well placed to build "the world's greatest golf course." Two weeks later, George Sorial, a Trump Organization executive, assured The Scotsman that the tycoon had a billion dollars earmarked for the course.

If those statements weren't damning enough, Molo's affidavit cited the real estate tycoon's literary works, which summarized his insouciant attitude toward paying back other people's money. Trump, the attorney observed, provided extensive advice on how to do business in his half-dozen or so books. In How to Get Rich, Trump advises readers to use the courts to "be strategically dramatic." In Think Big and Kick Ass in Business and in Life, he boasts of how he "love[s] to crush the other side and take the benefits." Trump's strategy—honed during his terrible financial struggles with lenders during the 1990s—"was to turn it back on the banks…. I figured it was the bank's problem, not mine," Molo quoted him as saying, in connection with unpaid debt.As a result of these maneuvers, by the mid-2000s, U.S. financial institutions had stopped lending to Trump for his building projects. Deutsche was the only one still willing to work with him.

[RELATED STORIES

RTX3LRDU

Mueller May Be Crossing Trump's Red Line

12_05_TrumpDebt

Mueller Demands Trump Bank Details From Deutsche Bank

RTX39IXY

Explaining Kushner, Trump Ties To Deutsche Bank

Trump

Democrats Seek Info on Trump's Deutsche Bank Accounts

GettyImages-884423084]

Trump Denies Russia Collusion—Again and Again

After Trump burned the bank, Deutsche shunned him as well. But Trump soon found a creative way to get off its blacklist—and return to solvency.'Are You Fucking Kidding Me?'Two years after Molo wrote his letter to the court, Trump settled his feud with the German bank. How he did it was bizarre: He paid back Deutsche with a massive lifeline—from Deutsche. Only this time he eschewed its real estate team—which wanted nothing to do with him—and got a loan from its private wealth division. This group typically deals with high-net-worth individuals, not real estate transactions, but in 2010 it not only lent him the money he owed its real estate team but also reportedly gave Trump another $25 million to $50 million in credit.

Deutsche employees in New York were surprised by the bank's decision. When asked whether it was normal to give more money to a customer who was a bad credit risk and liked to sue, one former senior staff member at the bank put it succinctly: "Are you fucking kidding me?"Over the next few years, the money kept rolling in for Trump. He took out two mortgages against a resort in Miami and a $170 million loan to finish his hotel in Washington, D.C. According to Bloomberg, by the time Trump was elected president of the United States in November 2016, he owed Deutsche around $300 million, an unprecedented debt for an incoming president. (His June financial disclosure showed he owes the bank $130 million, which is due in full in 2024.)The loans to Trump weren't the only abnormal behavior at Deutsche. Around the same time he received his new line of credit, thebank was laundering money, according to the New York State Department of Financial Services (DFS). Russian money. Billions of dollars that flowed from Moscow to London, then from London to New York—part of a scheme for which European and American regulators eventually punished the bank.

Was the timing of this illicit operation and the loans to Trump coincidental? Or evidence of something more sinister—a critical chapter in the president's long history of suspicious business deals with Russian and post-Soviet oligarchs? In January, Trump claimed the former, tweeting in his usual bombastic style: "I have nothing to do with Russia—no deals, no loans, no nothing." But the president's refusal to accept the assessment of his intelligence agencies—that Moscow meddled in the 2016 election—has, among other things, fueled suspicions about his ties to Russia.Robert Mueller is now trying to find out the truth about those suspicions. The special counsel is investigating Russian interference—from the hacking of the Democratic National Committee (DNC) to alleged coordination between the Trump campaign and Moscow. So far, his team has charged key Trump campaign officials Paul Manafort and Rick Gates with money laundering, as well as other offenses. He's also gotten two former advisers, Michael Flynn and George Papadopoulos, to plead guilty to lying to the FBI and cooperate with the probe.

Now, however, Mueller appears to be following the money, trying to determine if Trump has a financial connection to Russia—one that might at least partly explain his behavior. In December, the German newspaper Handelsblatt reported that the special counsel's office has subpoenaed Deutsche Bank, demanding data and documents related to people or entities tied to the president and those close to him. The White House says the subpoena doesn't directly pertain to Trump or his family's accounts. But if the president has a dark Russian secret, the German banking giant's money-laundering scandal may be key to finding out what it is.Friends With Kremlin Benefits

The story of how Deutsche became embroiled in the Trump-Russia probe dates back to 2005, when the German lender bought UFG, a boutique investment bank, to acquire an entry point into Moscow. UFG's co-founder and chairman was Charles Ryan, a charming American banker with libertarian views. Ryan's partner was Boris Fyodorov, a finance minister under former Russian President Boris Yeltsin. The bank straddled West and East, and was international and local.

The man behind Deutsche Bank's aggressive expansion was Anshu Jain, its future co-CEO. He persuaded Ryan to stay on and head up Deutsche's new Moscow office, and he came up with a controversial strategy to tap into potentially huge Russian profits:forge relationships with state partners. He wanted, in effect, to become friends with the Kremlin. One way of doing this was to hire people with connections. Among them: Russia's most powerful banker, Andrey Kostin, who had served as a Soviet diplomat in Sydney and London. (Intelligence sources think he was a KGB spy. Like many others who spoke to me for this story, they did so anonymously because they weren't authorized to talk to the press.) In the 1990s, he became head of Vnesheconombank (VEB), a state development institution described by one former CIA analyst as the "Kremlin's cookie jar." 

Then Vladimir Putin made Kostin head of Vneshtorgbank (VTB), another state-run bank, after which Kostin expanded it to operate in 19 countries.VTB worked in many countries with minimal oversight, which meant the Kremlin could use it for espionage. In 2005, VTB absorbed two banks traditionally used in Soviet times for spying and shifting currency to Western communist parties. These were the Moscow Narodny Bank, based in London, and Euro-bank, in Paris.

Meanwhile, Jain and Deutsche Bank recruited Kostin's 20-something son, Andrey. In spring of 2007, the young Kostin moved from a posting in London to Deutsche Bank in Moscow.Suddenly, Kostin's son got massive flows of business, a high-level banking source told me. And it appeared his father may have helped: Deutsche did a series of lucrative trades with VTB. According to the source, the German bank's Moscow subsidiary began posting profits of $500 million to $1 billion a year, with VTB generating somewhere between 50 and 80 percent of all revenue.

Jain came up with a controversial strategy to tap into potentially huge Russian profits: forge relationships with state partners. He wanted, in effect, to become friends with the Kremlin.

Other investment banks based in Moscow were chagrined and suspected that Deutsche owed its success to its alliance with Russian state interests. "They were doing some very curious things," says Christopher Barter, the CEO of Goldman Sachs Moscow at the time. "Nobody could make sense of their business. We found the nature and concentration of their business with VTB quite galling. Nobody else could touch VTB."Everyone in Moscow understood that VTB was more than a bank. It had ties to Russian intelligence. Putin's Federal Security Service (FSB) spy chief, Nikolai Patrushev, and his successor, Alexander Bortnikov, both sent their sons to work at VTB. The bank's deputy chief executive, Vasily Titov, chaired the FSB's public council.

VTB may have also had contacts with Trump associates, according to The New York Times. In November 2015, a few months after Trump announced he was running for president, one of his business partners, Felix Sater, wrote an email to Trump lawyer Michael Cohen, saying VTB had agreed to bankroll a Trump Tower Moscow project. Trump signed a letter of intent for the deal. When the project stalled, Cohen tried reaching out to Putin's spokesperson, Dmitri Peskov, to help jump-start it. But it ultimately failed.

Kostin, the VTB banker, says he doesn't know Sater and never had any role in the real estate deal. "We never, ever heard about this case," he told the Times. "It's absolutely wrong information; it's absolutely fake news."During those negotiations, Sater—the son of a Russian mafia boss—saw things differently. "Our boy can become president of the USA and we can engineer it," he wrote to Cohen about the Trump Tower Moscow plans. "I will get all of Putin's team to buy in on this, I will manage this process."

Shady Trades and Endless Vodka Shots

Well before Sater went looking for a deal there, the Russian capital was awash with petrodollars and opportunity. At the start of the new millennium, Moscow was an alluring destination for Western expatriates. Especially for young single males. There were the devushki—long-legged Russian girls, some from Moscow, some newly arrived from the provinces—who were keen to meet foreigners and practice their English. There were the nightclubs, the parties, fueled by toasts and endless vodka shots. And the friendships, always more intense than those at home.But there was a dark side to this new Russia—as one of those attracted by its offer of riches discovered. Tim Wiswell grew up in Old Saybrook, Connecticut, about 100 miles northeast of New York City. He was more of a repatriate than an expat: His father had worked in oil and gas in Russia. When he was 17, Wiswell spent a year at the Anglo-American School in Moscow and then returned to the United States for college. In his mid-20s, Wiswell went back to Moscow and got a job with Alfa, the private bank owned by the oligarch Mikhail Fridman.From there, he moved to Deutsche Bank. By age 29, he was head of Russian equities.

He found a Russian girlfriend—Natalia Makosiy, an art historian whom he met at a Moscow dinner party and later married.In the wake of the 2007-2008 crash, profits from the bank's Russian business plummeted. Traders were now under pressure to increase revenue. But after Wiswell took over around 2009, business was suddenly improving. And Barter suspects that "something nefarious" was going on at Deutsche during that time period.After the crash, Barter says, he was approached by "broker types, not very senior," seeking to do large, unexplained volumes of trades with Goldman Sachs.These were on behalf of major Russian clients. The brokers declined to identify their counterparties. Their names were concealed beneath "shell company after shell company," Barter says, making a due diligence impossible. He turned this business down "in five seconds."The same entities approached Wiswell and company, and got better results. Between 2011 and February 2015, Wiswell presided over a money-laundering scheme run from the equities desk of Deutsche Bank's Moscow office, according to a report from the DFS, and more than $10 billion was shifted from Russia to the West.The method was simple but effective.In Moscow, a Russian client bought blue-chip Russian stocks from Deutsche Bank Moscow in companies like Gazprom or Sberbank.The payments were in rubles. The size of a typical order was $2 million to $3 million. Shortly afterward, a non-Russian "customer" sold exactly the same number of securities to Deutsche Bank in London, paying in dollars.

[Deutsche Bank AG’s regional head office on Wall Street.] Deutsche Bank sued Donald Trump in 2008 for defaulting on a $640 million loan. Deutsche later bailed Trump out through its own private wealth division.

There was no economic logic to these "mirror trades," the DFS report found. The buyers and sellers were ostensibly different, but in reality, one in the same. At least 12 entities used the scheme to surreptitiously convert rubles into dollars. The money was interred in offshore accounts. Those involved moved billions out of one Deutsche location in Moscow to another location in New York through offshore territories such as Cyprus and the British Virgin Islands. There were nearly 6,000 of such transactions, and nobody in New York, London, Frankfurt or any other international financial centers seemed to notice.When outsiders raised concerns—like a European bank, for example—Wiswell swatted them aside. The DFS report said he told the European bank not to worry. Wiswell approved the trades with anonymous Russian clients. He "threatened" and browbeat his colleagues on several occasions, a New York regulator said, according to the report, "when it appeared they had not moved quickly enough to facilitate transactions."

In Moscow, Wiswell's 20-person equities desk was made up of Russians and Americans. One of its duties was to keep clients happy. That might mean extravagant skiing trips and visits to elite nightclubs. One of Wiswell's business (and skiing) partners was Dmitry Perevalov, the owner of a Moscow fund called Lanturno. About seven years ago, for his 40th birthday, Perevalov flew a group of people on a private jet to Mauritius. The jet belonged to the Russian Orthodox Church's most important bishop, Patriarch Kirill of Moscow, but Perevalov chartered it for the occasion. His guests stayed at the luxurious Four Seasons hotel in Anahita, on the east coast of the Indian Ocean island. Some invitees scarcely knew their host, a former bartender. Those who were his friends—including Wiswell—called him Dima.One guest who met Wiswell at the party described him as charismatic and charming, a tall, handsome, all-American guy.

This person also said Wiswell came across as a "major lightweight" in terms of banking and finance. "He had nothing special going for him. I remember him speaking pretty poor Russian. We wondered whether he was doing kosher business."Perevalov flew in a popular performer to crown his birthday celebration—the Russian rapper Timati, who gave a concert. Under a starry sky, guests danced to Timati's hit "Welcome to St. Tropez":Too much money in the bank accountHands in the airMake you scream and shout Drinks, private villas, waterskiing in the lagoon—everything was taken care of. "I was wondering: Who the fuck is paying for all this?" the guest told me. "It was crazy."Lightweight or not, Wiswell was getting rich. While the mirror trades were happening, Wiswell's wife became the owner of two offshore companies—one in the British Virgin Islands, one in Cyprus. In 2015, a counterparty paid $250,000 into her account. This was for "financial consulting." Similar payments, totaling $3.8 million, were made through two companies in Belize. These payments were "undisclosed compensation," the DFS found—"a bribe." Which bank cleared them?

Russia’s most powerful banker, Kostin, had served as a Soviet diplomat in Sydney and London. (Intelligence sources think he was a KGB spy.) Vladimir Putin made Kostin head of state-run VTB Bank, after which Kostin expanded it to operate in 19 countries.

According to journalist Ed Caesar, there were further payments made to the Wiswells. The idea of the money was "to hook you, so you are not going to do unexpected things," one Moscow broker told Caesar in an article published in The New Yorker. These payments were always made in cash and always delivered in a bag.The end of this scheme came in August 2015, when Deutsche Bank suspended Wiswell and then fired him. After that, he disappeared. There were Facebook postings from Southeast Asia and Bali, where the Wiswells went with their two small children. (He is now allegedly back in Moscow.) His lawyer, Ekaterina Dukhina, declined to comment on his case, but in his wrongful-dismissal suit against Deutsche, Wiswell said he was merely the fall guy for the bank's wrongdoing. He also claimed that around 20 colleagues, including two senior managers in London, knew all about the trades.The scandal was a grievous blow to Deutsche Bank's reputation. And an expensive one. About 10 days before Trump's inauguration, the DFS—which has the power to suspend any bank with a branch in New York—fined the bank $475 million. London's Financial Conduct Authority imposed a £163 million ($218 million) penalty. (The Justice Department and the U.S. Attorney's Office in the Southern District of New York are still investigating the bank's role in the scandal.

The bank carried out an internal review, which didn't identify the Russians behind the scheme. It's still unclear who they were or where the billions went. Or where the money came from in the first place.What is clear, however, from the DFS report and conversations with sources in Moscow is that a Kremlin bank, VTB, run by proxies of the FSB, had seemingly captured Deutsche Bank's Moscow outpost. The German bank's London and New York divisions were economic beneficiaries of this arrangement, as they facilitated the illegal flight of capital by some well-connected Kremlin insiders.While this was going on, Deutsche Bank in New York was lending hundreds of millions of dollars to the future American president, a man known to be litigious and a credit risk.My Guardian colleague Nick Hopkins and I wanted to find out if Trump's loans and the money-laundering scandal were connected. But Deutsche Bank stonewalled us; its policy was to say nothing about its clients, including the president.

The Russian Laundromat

In late 2016, that question and others led Hopkins and me to a man now at the center of Mueller's inquiry: Christopher Steele.This was before the world knew he was behind the famous dossier, raw intelligence alleging, among other things, that Russian intelligence had years of compromising information on Trump, some of it sexual in nature. Hopkins knew Steele, but neither of us were aware of what he was sitting on in that dossier.We met on a Thursday afternoon, weeks before Christmas, when London's streets were crowded with shoppers. Steele had agreed to chat over 4 o'clock tea. We tried a café and wine bar called Balls Brothers—and found a tucked-away table. I went to the bar and came back with drinks: beer for Steele, Coke for Nick, pot of tea for me.Steele clearly likes being in the shadows, away from publicity or fuss. In the world of corporate intelligence, the fewer people who know what you are doing, the better. "Have you heard of me?" he asked.I confessed I hadn't.

I knew most of the people in London who were focused on Russia, but not Steele."Good," he said. "That's how I like it."

For the next 45 minutes or so, we asked Steele about Trump's connections to Moscow.He offered helpful hints about following the money but little more.In addition to questions about Deutsche Bank, we inquired about another Russian money-laundering operation, one that involved Putin's cousin Igor. Between 2010 and 2014, Moscow bankers were sending cash out of the country through something called the Global Laundromat—a scheme that cleaned at least $20 billion, according to investigators in Moldova and the Balkans, though the true figure may be much greater.This is how it worked: Shell companies in the United Kingdom "lent" money to one another, at least on paper. Russian businesses underwrote these "loans." Company A would default on paying back Company B. Typically, a Moldovan citizen was involved. The companies would obtain a court judgment in Moldova asking the Russian firms to settle the debt. 

And voilà! The Russian businesses would legally transfer hundreds of millions of dollars to a bank in Moldova's capital, Chisinau.From Chisinau, the money went to a bank in Latvia, Trasta Komercbanka. From there, the cash went everywhere, to 92 countries, much of it vanishing offshore.The Latvian bank required a corresponding Western financial institution to process its dollar-denominated transactions.

Most U.S. banks, including JPMorgan Chase, refused to offer banking services to Trasta, given the city of Riga's reputation as a European money-laundering hub. Only two Western banks agreed, according to Moldovan and Latvian investigators. Both were German: Deutsche Bank and Commerzbank. Once again, Deutsche was the entry point for criminal Russian money into the global financial system, the investigators found. (The bank severed its relationship with Trasta shortly before Latvian officials shut down the bank in 2016 for money laundering.) According to the DFS, Deutsche was reluctant to classify Russia as a "high-risk" location for money laundering.

Sergei Gorkov, chairman of Vnesheconombank (VEB Bank), which Andrey Kostin had run and whom Putin had promoted. Gorkov met directly with Jared Kushner in New York.

When Hopkins and I asked Deutsche Bank about the scandal, we were rebuffed. So we talked to current and former Deutsche Bank staff. According to one senior ex-employee, who worked in equities in Asia and New York, the bank's problems went way beyond these scams. The 2008 crash hit Deutsche Bank hard, the employee said. In order to cover up holes in the balance sheet, a few members of staff took part in risky, complex and possibly illegitimate forms of finance.These practices were extensive, the person alleged. They might have involved innovative and opaque ways of getting outside parties to underwrite risky loans, the banker added, using structures to disguise who ultimately are the lenders and the beneficiaries.Such impenetrable structures have led some to wonder whether Deutsche's unusual loans to Trump and its Russian money-laundering schemes were connected.

Adding to the intrigue: the statements of Trump's own children. In May, for instance, golf writer James Dodson said that during an interview more than three years ago, Trump's son Eric boasted that his father's company had access to Russian money. "We don't rely on American banks," Dodson said Trump told him. "We have all the funding we need out of Russia." (Eric Trump later denied he made this claim.) Years earlier, at a real estate conference in 2008, Donald Trump Jr. said, "Russians make up a pretty disproportionate cross-section of a lot of our assets." He later added, "We see a lot of money pouring in from Russia."

In an interview with Prospect magazine, Richard Dearlove, the former head of British secret intelligence service MI6, summed up the suspicions surrounding the alleged connection between Trump, Russia and Deutsche Bank. "What lingers for Trump may be what deals—on what terms—he did after the financial crisis of 2008 to borrow Russian money when others in the West would not lend to him."According to our sources inside Deutsche Bank,Trump's bid to become president made him a politically exposed person, or PEP. Banks scrutinize such individuals carefully because they're often targets for illicit financial schemes.Deutsche reviewed its lending to Trump and his relatives. Its goal was to discover if there was a Russian connection to Trump's loans. The DFS also requested information from the bank about its dealings with Russia. The sources were vague about the review, who carried it out and what its precise conclusions were. But they insist that no trail to Moscow was ever discovered.Other sources suggest the review was cursory, but Deutsche hasn't released any information about it, so there's no way to evaluate either claim. Meanwhile, Trump refuses to release his tax filings, breaking decades of precedent.

Over the past year, U.S. lawmakers such as Maxine Waters, the top Democrat on the House Financial Services Committee, have urged the bank to privately hand over its internal review—along with information about Trump's accounts—but Deutsche declined to do so, citing privacy rules.Now, nearly a year after BuzzFeed published Steele's dossier, the bank is handing records over to Mueller, as the special counsel tries to figure out if there is a connection between the Russian laundromat and the president of the United States.They Went to Jared The special counsel's inquiry could also reach people in Trump's orbit. Many were clients of Deutsche Bank—and also credit risks. Among them is Jared Kushner, Trump's son-in-law, who is trying to salvage a massive—and reportedly imperiled—investment in 666 Fifth Avenue, a prominent piece of Manhattan real estate. His relationship with Deutsche emerged in 2013, when he apparently ordered a flattering profile of Trump's wealth manager, Rosemary Vrablic, by his newspaper, The New York Observer.

In a letter this spring to Bill Woodley, Deutsche Bank's U.S. CEO, Senator Chris Van Hollen expressed concerns about the bank's lending to Kushner, who had a $25 million line of credit with the German institution. In October 2016, it loaned him $285 million. The cash was used to replace an existing loan on the old New York Times building, which Kushner had bought the previous year from Lev Leviev, a businessman from the former Soviet Union.

The bank made the loan at a time when Kremlin representatives were eager to speak to Trump's son-in-law, according to a timeline laid out in Kushner's testimony to Congress. In April, he first met Sergey Kislyak, the Russian ambassador, when Trump gave his foreign policy speech at D.C.'s Mayflower Hotel—just a handshake and pleasantries, Kushner said. Next came a meeting at Trump Tower with Natalia Veselnitskaya, the Moscow lawyer who sat down with Kushner, Manafort and Trump Jr. They talked about dirt on Hillary Clinton and repealing the Magnitsky Act, an Obama-era law that leveled sanctions against Russians accused of human rights abuses.

Then, on November 16, Kislyak got in touch again. By this point, it was clear that Kushner would become senior adviser to the president.There was another Kushner-Kislyak meeting, on December 1 at Trump Tower. Flynn, Trump's adviser, was present too, as Kushner made an unusual proposal: He asked Kislyak if it would be possible to set up a secret and secure communications channel between the Trump transition team and the Kremlin. The purpose, it seems, was to keep their conversations hidden from the outgoing Obama administration and U.S. intelligence. Could this be done, Kushner wondered, by using Russian diplomatic facilities in the United States? The inquiry was staggeringly naïve.

If Kushner or Flynn were to drop by the Russian Embassy, U.S. intelligence would certainly notice.The FBI hadn't bugged that conversation but learned of it when Kislyak reported to his superiors back in Moscow. According to FBI intercepts of those Russian communications, Kislyak was taken aback by Kushner's request. It was unlikely Moscow would allow any American to use its encrypted networks. The Trump transition team said nothing about these secret negotiations. One person who knew the details was so alarmed he sent The Washington Post an anonymous note about it, explaining what had happened.Russia, it seemed, didn't need to expend much effort to get close to Trump's aides.

Kislyak came up with a suggestion of his own, according to Kushner's testimony. Perhaps Kushner would like to meet with another person from Moscow, someone with "a direct relationship" to Putin?  During a meeting between Kislyak and Kushner's assistant, Avi Berkowitz, on December 12, they agreed on the details of this meeting. Putin's emissary turned out to be a banker, or, more accurately, a banker-spy. His name was Sergey Gorkov, and he was the head of VEB, the state development bank, which Kostin had run, and whose board Putin had chaired during his four years as prime minister. He had trained in the 1990s at the FSB's academy before joining energy company Yukos and state-run Sberbank. Like VTB, Sberbank was allegedly an arm of the Kremlin. It was the official sponsor of the 2013 Miss Universe contest in Moscow, attended by Trump andhosted by Emin Agalarov, the pop-star son of Aras Agalarov, who worked with Trump to bring the pageant to Russia. Eight days after the contest, Sberbank announced it was lending Agalarov $1.3 billion to finance new projects. One of those under consideration was Trump Tower Moscow. In February 2016, Putin promoted Gorkov to VEB chief.

Deutsche Bank loaned Jared Kushner $285 million to replace an existing loan on the old New York Times building, which Kushner had bought from Lev Leviev, a businessman from the former Soviet Union. The bank made the loan at a time when Kremlin representatives were eager to speak to Trump’s son-in-law.

The bank's mission was to support Moscow's political programs. It provided capital to build facilities at the Sochi Olympics and fund secessionist rebels in eastern Ukraine. These top-down ventures lost money. VEB had large debts. The United States had included VEB, VTB and Sberbank in the sanctions it passed in 2014 after Putin annexed Crimea. And Gorkov's job was to restore the bank's fortunes.Gorkov was well prepared for his meeting with Kushner. He was, after all, a graduate of the Dzerzhinsky Higher School, a KGB training center. He flew in from Moscow bearing gifts. Among them: soil from the town of Novogrudok in northwest Belarus, where Kushner's paternal grandmother grew up. In 1941, the German army arrived, and the town's Jewish inhabitants were rounded up and forced to live and work in an agricultural college. Around half were executed. The survivors dug a tunnel, and in September 1943 they crawled out, fleeing into the forest.This information and much more would have been included in the FSB's Kushner file.

Gorkov's presents were chosen to remind the young Trump adviser of his origins in a part of the world that once belonged to the Soviet Union, and of his spiritual roots. (This subtlety was wasted. In his written testimony to Congress, Kushner said Putin's messenger had given him a "bag of dirt." It came from "Nvgorod," he wrote, spelling his grandmother's birthplace incorrectly.)

This meeting occurred on December 13, and according to Kushner, Gorkov introduced himself and "made some statements about the Russian economy." The banker said he was friendly with Putin, expressed disappointment about the state of U.S.-Russian relations under President Barack Obama and "his hopes for a better relationship" in the future, Kushner told congressional committees.There was no discussion of lifting sanctions, Kushner said. Nor was he offered any commercial deals. Kushner characterized the encounter as brief, meaningless. But there's no official record of what was said in the meeting, so this is hard to verify. After all, it was difficult to discuss the Russian economy without mentioning its depressed state. Gorkov then flew directly from New York to Japan, where Putin was attending a summit. He would likely have reported the details of the meeting then.Kushner's official account to Congress on his dealings with Kremlin representatives is 11 pages long.

It's a flat, sterile document, clearly reviewed by his lawyers. In his version, there was no wrongdoing, just a series of inconsequential meetings during a hectic campaign. Kushner said in written evidence to Congress that he even forgot Kislyak's name. There was no secret channel. Nor did he rely on "Russian funds" to finance his business. In short, a nothing burger with Russian dressing.Despite these protestations, it's clear Russian intelligence found it easy to access Trump's inner circle. Ambassadors, lawyers, bankers...all made their way to Trump Tower in 2016. All were welcomed and listened to. Gorkov was part of them, but the cast also included Kislyak, Veselnitskaya and the Agalarovs and other unknown actors working behind the scenes.

Targeting Kushner was logical. He was soon to become a federal employee. His White House portfolio included tax policy, the military and international affairs. In a protean White House—where anyone could be fired—Kushner's status as the president's son-in-law made him unfireable.

During his meetings with Russians, Kushner apparently said nothing about Moscow's attack on American democracy during the presidential campaign, nothing about hacking the Democratic National Committee or circulating fake news on Facebook, Twitter and other platforms. He also kept his meetings with the Russians secret. So did the Trump administration. In his security clearance form, Kushner didn't mention Gorkov or Kislyak. (Kushner said this was an accident, an administrative error by an underling.)The American public found out about these meetings only because of a steady stream of leaks—leaks that would eventually offer Mueller some important clues.

Ursa Major

Today, the questions Mueller is asking seem to be the same questions that led us to meet with Christopher Steele last year. Namely: Was Trump hiding a connection to Russian money? And if so, was Moscow blackmailing him with that information? And how?On the campaign trail—and well before he became a candidate—Trump's praise of Putin was effusive and unwavering. He called him a strong leader and claimed they'd spoken and gotten along well. His fidelity to Russia's president has continued in the White House, even as he lambasted other world leaders, turned on aides and allies, fired the head of the FBI and publicly humiliated his attorney general. Shunning Putin would have been the savvy political move, but he has refused to do so.

Robert Mueller, then FBI director, testifies during a hearing of the Senate Appropriations Committee’s Commerce, Justice, Science, and Related Agencies Subcommittee on Capitol Hill, on May 16, 2013. Mueller appears to be following the money, trying to determine if Trump has a financial connection to Russia.

Republicans have criticized Steele's dossier because the DNC and Clinton campaign helped pay for it. But the document offers a compelling explanation for the president's unusual behavior vis-à-vis Russia. First, there was Moscow's alleged kompromat operation against Trump going back three decades. If the president had indulged in compromising behavior, whether sexual or otherwise, Putin likely knew of it. Second,there was the cash from Russian oligarchs that went into Trump's real estate ventures—and the prospect of a lucrative deal to build a hotel and tower in Moscow, a project that was still being negotiated as Trump addressed adoring crowds on the campaign trial. Finally, there were the Deutsche Bank loans that rescued Trump after the crash. They had come from a bank that was simultaneously laundering billions of dollars of Russian money. (Though parts of Steele's dossier remain unverified, some of his claims have been substantiated. The former spy told his friends he believes the document is about 70 to 90 percent accurate.)

And then there are the people in the president's inner circle. Wherever you look, there is a link to Russia. His pick for secretary of state? Rex Tillerson, a figure known and trusted in Moscow, and recipient of the country's Order of Friendship. Former national security adviser? Flynn, a beneficiary of undeclared Russian money. Campaign manager? Manafort, longtime confidant to ex–Soviet oligarchs. Foreign policy adviser? Carter Page, whom Russia tried to recruit as a spy. Commerce secretary? Wilbur Ross, an entrepreneur with Russia-connected investments. Personal lawyer? Cohen, who sent emails to Putin's press secretary. Business partner? Sater, who sent Flynn a plan to lift Russian sanctions. And so on.It was almost as if Putin had picked Trump's Cabinet. The U.S. president, of course, did the choosing, but the pattern of all these individuals, and their alignment with Russian interests, forms a constellation. Call it Ursa Major. A big Russian bear Robert Mueller is now hunting—at Deutsche Bank and beyond.

This article was adapted from Collusion: Secret Meetings, Dirty Money, and How Russia Helped Trump Win by Luke Harding

==

==

https://www.alternet.org/wall-streets-corruption-runs-deeper-you-can-fathom

[quite long]

Of the myriad policy decisions that have brought us to our current precipice, from the signing of the North Atlantic Free Trade Agreement (NAFTA) to the invasion of Iraq and the gerrymandering of House districts across the country, few have proven as consequential as the demise of Glass-Steagall. Signed into law as the U.S.A. Banking Act of 1933, the legislation had been crucial to safeguarding the financial industry in the wake of the Great Depression. But with its repeal in 1999, the barriers separating commercial and investment banking collapsed, creating the preconditions for an economic crisis from whose shadow we have yet to emerge.

Carmen Segarra might have predicted as much. As an employee at the Federal Reserve in 2011, three years after the dissolution of Lehman Brothers, she witnessed the results of this deregulation firsthand. In her new book, “Noncompliant: A Lone Whistleblower Exposes the Giants of Wall Street,”she chronicles the recklessness of institutions like Goldman Sachs and the stunning lengths the United States government went to to accommodate them, even as they authored one of the worst crashes in our nation’s history.

“They didn’t want to hear what I had to say,” she tells Robert Scheer in the latest installment of “Scheer Intelligence.” “And so I think what we have in terms of this story is really not just a failure of the banks and the regulators, but also a failure of our prosecutors. I mean, a lot of the statutes that could be used—criminal statutes, even, that could be used to hold these executives accountable are not being used, and they have not expired; we could have prosecutors holding these people accountable.”

Segarra also explains why she decided to blow the whistle on the Fed, and what she ultimately hopes to accomplish by telling her story. “I don’t like to let the bad guys win,” she says. “I’d rather go down swinging. So for me, I saw it as an opportunity to do my civic duty and rebuild my life. … I was very lucky to be blessed by so many people who I shared the story to, especially lawyers who were so concerned about what I was reporting, who thought that the Federal Reserve was above this, who thought that the government would not fail us after the financial crisis, and who were livid.”

“Noncompliant” explores one of the darkest chapters in modern American history, but with a crook and unabashed narcissist occupying the Oval Office, its lessons are proving remarkably timely. “We live in a culture where we reward bad behavior, we worship bad behavior, and it’s something that needs to stop,” she cautions. “Changing the regulatory culture on [a] U.S. governmental level is something that’s going to take a decade, maybe two. And we need to start now, before things get worse.”

Listen to Segarra’s interview with Scheer or read a transcript of their conversation below:

Robert Scheer:Hi, I’m Robert Scheer, and this is another edition of “Scheer Intelligence,” where the intelligence comes from my guests. Today, Carmen Segarra. She’s written a book, just came out, called “Noncompliant: A Lone Whistleblower Exposes the Giants of Wall Street.” And boy, did she ever. Perhaps you remember this case; it was in 2011, two, three years into the Great Recession. There was a lot of pressure from Congress that these banks be regulated in a more serious way. As a result, Carmen Segarra, someone of considerable education, was brought in. And she was assigned to do a survey of Goldman Sachs, to go over to Goldman Sachs. And I just want to preface this, people have to understand that not only is the Federal Reserve an incredibly—the most important economic institution in the United States, but the New York Federal Reserve plays a special role being in New York. And they are basically entrusted with regulating the banks, and they are the institution that most definitely failed in that task, and helped bring about the Great Recession. Would you agree with that assessment?

Carmen Segarra:Yes, I would agree with that assessment. When I joined the Federal Reserve, as you pointed out, I was hired from outside the regulatory world, but within the legal and compliance banking world, to help fix its problems. And I was well aware of the problems that existed. And scoping the problems itself was relatively easy; I mean, within days of arriving, I had participated in meetings where you had Goldman Sachs executives, you know, lying, doublespeaking, and misrepresenting to regulatory agencies without fear of repercussions. And where I saw Federal Reserve regulators actively working to suppress and expunge from the record evidence of wrongdoing that could be used by regulatory agencies, prosecutors, and even the Federal Reserve itself to hold Goldman Sachs accountable. The question was, when I arrived, you know, are these problems fixable? And, spoiler alert: I don’t think so.

RS:Well, your book really is a compelling read on, really, what one could consider the dark culture of finance capital. Most of us know very little about it; we think it’s boring, it’s detailed and so forth. And I was thinking of another woman observer of great education and experience, who first tipped me off as a journalist when I was trying to cover the stuff about banking deregulation and so forth, and when Clinton was president and they did the basic financial deregulation. A woman named Brooksley Born, who was head of the Commodity Futures Trading Commission, and she had your kind of background, you know; a leading lawyer with the banks, and so forth. Understood this a lot better than most of the men who were powerful, including Treasury Secretary Robert Rubin; Lawrence Summers, who took over from him and went on to be the head of Harvard; Alan Greenspan–none of them really understood these collateralized debt obligations, credit default swaps; she did. She blew the whistle on it, and they basically destroyed her. She was forced out of the Clinton administration, and what have you. Did you know about Brooksley Born’s work when you got into this? Do you have any sense? I mean, this was really sort of the first major whistleblower, and she was, as you have been, basically pushed aside.

CS:Yes. I definitely knew about her. And you know, I have to say that I was, you know, just taking that historical perspective, which I think is an important point of view through which we should approach this topic. I mean, I remember when I was in law school, I was one of the very first graduating classes to graduate into a post-Glass-Steagall world. From a 50,000-foot level, I think people have a better understanding of what that means, in the sense, you know, you have all of a sudden the securities and the banking products can get together. But from a practical standpoint, from a ground-zero level, where I was at, that essentially meant two things. From a professional standpoint, we studied and were aware of the fact that there were a bunch of people on one side of the aisle, the investment products side–you know, the collateralized debt obligations that you mentioned. And then there were people who were on the banking side; we’re talking, you know, for purposes of argument, credit cards and debit cards. And that these people, they may have known about their products, but they were highly specialized; they only knew about the one or two things that they touched, and they certainly didn’t know about them and how they interacted together. And one of the things that I remember studying were not just the cases of whistleblowers, but also discussing amongst our classmates, you know, what the impact would be of all of a sudden having a class or a series of classes, graduating from law school, with people who are focusing on banking and compliance, like I was, and who are having to understand both of these products and sort of how they interact together. And what, sort of visualizing what our work life would be like, in terms of reporting to people that had an incomplete understanding of how the banking world worked. So, yes, I was definitely aware; I understood perfectly where she was coming from. And she was very much a cautionary tale for the rest of us who are lawyers. In terms of, if you find yourself in these difficult situations, you sort of game out what potentially can happen. And I certainly took it into consideration when I was gaming out whether or not to whistleblow.

RS:Well, before you get to the whistleblowing stage, I think you’re being too kind to what I personally think are people who should be considered as, or at least charged and examined often with what is criminal behavior. Because ignorance is really not a good defense; when they were called before congressional committees, these knowledgeable people admitted they really didn’t understand collateralized debt obligations and credit default swaps. And for people who are not that familiar, you mentioned Glass-Steagall. And what Glass-Steagall was, was one of the, really maybe the most important response of Franklin Delano Roosevelt’s democratic administration to the Great Depression. And how did this terrible depression happen, how were the banks so irresponsible. And they decided the key thing was to separate investment banks from commercial bank; investment banks could be high-rollers, private money, you know what you’re doing, you have knowledge; and commercial banks where you’re basically protecting the assets of ordinary people, they’re not knowledgeable, they’re trusting your expertise. And eliminating Glass-Steagall eliminated this wall between the two kinds of banking. And the company that you went to observe, Goldman Sachs, was an investment bank. And by the working of that law, they should have been allowed to go belly-up when it turned out they had a lot of these dubious credit default swaps and collateralized debt obligations. To people who don’t know, a credit default swap was a phony insurance policy pretending to cover these things, but really there’s nothing backing it up. And somehow, in order to save them, they were allowed to announce they could do commercial banking. One could argue, in some ways, the barrier was lifted to help–Citigroup was of course the other one–Citibank. And these are two banks that the government stepped in to help and create this monster. Is it not the case?

CS:Yeah, that’s absolutely the case. But there’s a couple of things that we need to keep in mind. I mean, I think that we’re all sort of educated enough to know that, you know, where there’s a will, there’s a way. And so if a system can be corrupted, people that are allowed to grab hold of power will corrupt it–insofar and only for so long as we allow those people to have the ability and the power to corrupt it. So ultimately, talking about more or less rules, or different rules, is productive only to a point. Because ultimately what we’re talking about here is the haphazard, slap on the wrist, failure to truly enforce the rules and regulations equitably across the system. And that creates the imbalances that you see, for example, in Goldman Sachs,and that you see in the system in general. One of the things that happened as a result of Glass-Steagall coming down was that a lot of the investment bankers were allowed to take over the commercial banks. And those investment bankers knew nothing about banking, and Goldman is a great example of that. I mean, when I arrived three years in after the financial crisis, what was one of the things that was very shocking to me was going into meeting after meeting with Goldman senior management and hearing them lie, doublespeak, and most shockingly of all, insist that they didn’t have to comply with the law. And that is a problem. Because a bank that doesn’t believe, or management at a bank that doesn’t believe they have to comply with the law–you bet they are not supervising their employees correctly, and they’re not incentivizing employees correctly in terms of how to do their job. So their behavior is injecting enormous risk into the system.

RS:Why should they think they should comply with the law when they got the law written and they could get it rewritten? I mean, after all, the treasury secretary, who pushed in the Clinton administration, right, to get rid of this restraint of Glass-Steagall and allow companies like Goldman Sachs to cross that line, was Robert Rubin. And he had been a top executive at Goldman Sachs. In fact, people used to refer to it as Government Sachs, that they had people all over the government, and it was a revolving door. And I want to point out that what you did, which was really unique–you had the guts to record these conversations. When you finally got to have your say before Congress, you could be backed up because you had the record. And tell us about that record. The conversations you recorded are absolutely chilling in describing an atmosphere of cynicism; you know, corruption; contempt, actually, for the political process and for restraint and regulation.

CS:Yeah. And I would sort of add that part of what the book sort of points out is that I didn’t really get my say. I mean, Congress did hold a hearing, but they did not invite me to testify. They didn’t want to hear what I had to say. And so I think what we have in terms of this story is really not just a failure of the banks and the regulators, but also a failure of our prosecutors. I mean, a lot of the statutes that could be used–criminal statutes, even, that could be used to hold these executives accountable are not being used, and they have not expired; we could have prosecutors holding these people accountable. We could have trial lawyers filing cases and holding these people accountable. Yet we can’t count on them to do it; we can’t count on the judiciary to do anything about it. I mean, when you read about what happened in my case in the book, it’s tragic, you know? It’s unbelievable.

RS:Tell us about that. Because you had a judge who was actually deep into this system who threw your case out.

...

==

USD Partners, a rail terminal operator owned in part by Wall Street giant Goldman Sachs, has signed a nearly three year deal to facilitate moving tar sands by train from where it is extracted in Alberta, Canada, to an offloading terminal in Stoud, Oklahoma, in a route mirroring that of the Keystone XLpipeline.

From Stroud, the heavy oil can be sent via pipeline to the nearby oil storage hub in Cushing, Oklahoma. USD's announcement, which said the company could transport up to 70,000 barrels per day of tar sands in rail cars, came in a June 2 filing with the Securities and Exchange Commission (SEC).

The deal, centering around the purchase of the Stroud terminal, also included the acquisition of 300,000 barrels of storage space in Cushing, a town known by oil and gas industry observers as the “pipeline crossroads of the world.”

==

https://theintercept.com/2017/03/15/donald-trump-isnt-even-pretending-to-oppose-goldman-sachs-anymore/

THE CONTINUITY OF Wall Street’s dominant role in American politics — regardless of what party sits in power or how reviled the financial industry finds itself across the country — was perhaps never more evident than when Jake Siewert, now a Goldman Sachs spokesperson, on Tuesday praised the selection of Jim Donovan, a Goldman Sachs managing director, for the No. 2 position in the Treasury Department under Steve Mnuchin, himself a former Goldman Sachs partner.

“Jim is smart, extraordinarily versatile, and as hard-working as they come,” Siewert gushed. “He’ll be an invaluable addition to the economic team.”

The punch line? Siewert was counselor at the Treasury Department to Timothy Geithner, as well as a White House press secretary under Bill Clinton.

The ubiquity of Goldman Sachs veterans across numerous presidencies throughout history, both Republican and Democratic, has been well documented. But Donald Trump sold himself as something different, an economic nationalist determined to rankle Wall Street. He even ran campaign ads savaging bankers like Goldman CEO Lloyd Blankfein for their role in a “global power structure.”

That populist smokescreen is long gone now.

Mnuchin and Donovan are just two of five Goldman expats in high-level positions on Trump’s team. Steve Bannon spent a limited time at Goldman Sachs, but White House assistant Dina Powell, who headed the bank’s philanthropic efforts, and National Economic Council director Gary Cohn, Goldman’s former president, had higher-ranking positions for a longer period. Jay Clayton, Trump’s nominee for the Securities and Exchange Commission, was a partner for Goldman’s main law firm, Sullivan and Cromwell.

White House Chief of Staff Reince Priebus reportedly blocked Donovan from Treasury initially, amid fears of an image problem with too many “Goldman guys.” But Donovan got the post anyway.

Other big banks are represented inside team Trump as well. Several expats of Mnuchin’s OneWest Bank, which repeatedly brutalized homeowners during the foreclosure crisis, have been rumored for key spots at the banking regulators.

The same day as Donovan, Trump announced the nomination of David Malpass as treasury undersecretary for international affairs. Malpass was the chief economist for Bear Stearns right before the investment bank imploded. He literally wrote an opinion piece called “Don’t Panic About Credit Markets” for the Wall Street Journal in August 2007, noting, “Housing and debt markets are not that big a part of the U.S. economy.”

But it’s not just the presence of ex-bank executives that matters; it’s the policy menu oriented to Wall Street’s wishes.

After dalliances with unorthodox proposals for a Republican, Trump has settled into an agenda of tax cuts and deregulation — particularly for the financial industry. Cohn laid out the new paradigm in an interview with the Wall Street Journal last month, promising lighter supervision and even lower capital requirements for the financial sector. J. Christopher Giancarlo,Trump’s choice to run the Commodity Futures Trading Commission, which handles derivatives regulations, hijacked a federal advisory panel to recommend abandoning limits on commodity speculation, of the kind pursued by big banks like Goldman Sachs.

Donovan is expected to play a major role in tax policy, which will be overwhelmingly tilted to benefiting the wealthy, despite claims from Mnuchin that the rich will see “no absolute tax cut.” Even Trump’s flailing health care proposal is really little more than a large tax cut for the wealthiest Americans, financed by cuts to the low-income Medicaid program.

Even in areas where populist sentiment was seen as pre-eminent, Trump has reportedly succumbed to the Wall Street advance. A dramatic piece in the Financial Times described a “civil war” within the White House over trade, pitting Trump’s hard-liners like Bannon and trade policy adviser Peter Navarro against the likes of Cohn. It stated that Navarro was being sidelined, with Cohn taking a larger role in the negotiations over NAFTA, and with foreign leaders working through the National Economic Council rather than Navarro in trade talks. AFL-CIO official Thea Lee said in the story, “It appears the Wall Street wing … is winning this battle.”

At the NEC, Cohn hired Andrew Quinn, a chief negotiator for the Trans-Pacific Partnership, to coordinate international trade and development. A stewing Breitbart News called Quinn “the enemy within.”

Not enough has happened on trade to declare the winner of this internecine battle; indeed, the Financial Times reported that Trump took Navarro’s side in a recent Oval Office meeting. But in confirmation hearings Tuesday, Robert Lighthizer, Trump’s pick for U.S. trade representative, praised his predecessor Michael Froman, architect of the TPP (and himself a former Citigroup executive), arguing that some of that work could be used in constructing a successor to NAFTA. Lighthizer also vowed tough enforcement of trade rules but said little about tariffs or the kinds of disruptive policies Trump touted in the campaign, which Wall Street disfavors.

Banks have celebrated since Trump’s election, composing the lion’s share of the “Trump bump” in stock prices. Goldman Sachs shares have risen from $181.92 on Election Day to around $250 today, an increase that accounts for as much as one-fifth of the total rise in the Dow Jones Industrial Average over that period.

Not only do Goldman executives benefit, but so do their alumni: Cohn received nearly $300 million in severance from Goldman after moving into government. He’s vowed to recuse himself from anything “directly” affecting his former company, but that doesn’t necessarily apply to tax and regulatory policies affecting the entire financial sector.

http://www.businessinsider.com/trump-targets-steven-mnuchin-for-treasury-secretary-2016-11

==

https://www.democracynow.org/2017/3/15/headlines/trump_to_tap_goldman_sachs_banker_james_donovan_to_be_deputy_treasury_sec

Trump is expected to tap Goldman Sachs banker James Donovan to be deputy treasury secretary. Donovan would work directly for another former Goldman Sachs banker: now Treasury Secretary Steven Mnuchin. Trump has also tapped nearly another half-dozen more people tied to Goldman Sachs to join his administration, including National Economic Council Director Gary Cohn, Trump chief strategist Stephen Bannon, Securities and Exchange Commission chair nominee Jay Clayton, senior White House adviser Anthony Scaramucci and senior counselor for economic initiatives Dina Habib Powell.

==

Five years ago Goldman Sachs played the arch-villain of the financial crash, the very essence of a greedy, rapacious bank that profited while ripping off its own customers and the American people. As the vampire squid, it was the perfect target for the Zuccotti Park demonstrations that turned into Occupy Wall Street with 900 encampments around the world.

The charges against Goldman Sachs were real. They really did violate the law. They really did rip off their customers. They really did defraud investors. As of today, it has paid nearly $9 billion in government fines for its shoddy dealings. Of course, no one has gone to jail for these enormous swindles.

During the 2016 presidential campaigns, the Goldman Sachs brand continued to be politically toxic. Yet Hillary Clinton proceeded to accept $675,000 from Goldman Sachs for three speeches. First Sanders and then Trump pounded her for catering to Wall Street elites. It was certainly not the only reason for Clinton's defeat, but it may have contributed.

Remarkably, Trump believes the toxicity won't rub off on him. In a clearcut signal to the financial community, he has opened the White House to powerful Wall Street appointees. Goldman Sachs, again, has one of its own, Steven Mnuchin, as Treasury Secretary and Gary Cohn as chair of the National Economic Council. Other Goldman Sachs alumni in the Trump administration include chief White House strategist Steven Bannon, Jay Clayton as head of the Securities and Exchange Commission, and Dina Powell as a White House adviser.

Trump may be setting a record for Goldman Sachs appointees.

Will Trump Pay the Price?

A good part of Trump's victory was built upon three deep resentments simmering in the electorate: hatred of Wall Street and what it got away with, disgust over trade deals that destroyed decent U.S. jobs, and the off-shoring of U.S. jobs to low-wage areas.

By recruiting Goldman Sachs alumni to run government economic policy, Trump has set himself on a collision course between his jobs/trade pledges and his desire to kiss up to Wall Street.

So how does Trump justify his new love affair with Goldman Sachs executives? He can't. His team defends the choices by saying they are only hiring the very best people, not Goldman Sachs. Media outlets like the New York Times then confirm the good character of these choices by interviewing prominent people like former New York Mayor Michael Bloomberg (himself a Wall Street billionaire), who says, “Whatever you may think of them individually, you can’t get to be a Goldman partner and survive if you’re stupid, lazy or unprofessional.”

But such media fluff is irrelevant. It doesn't matter whether they are smart or able. Of course they are. What matters is the world view they will carry into the heart of the Trump administration. After decades on Wall Street, the needs of global finance shape their entire universe, their sense of the possible and their sense of justice.

Even a cursory investigation leads to an obvious conclusion: The Goldman Sachs view of the world is all about the outsourcing of jobs and the promotion of corporate trade: the polar opposite of what Trump claims he wants for working people.

The Goldman Sachs Commandments

Goldman Sachs sits at the heart of the global network of production and distribution of nearly everything we use and need. This is not an exaggeration. Of the largest 43,060 trans-national corporations, only 147 corporations, nearly all of them financial, exercise significant control, directly and indirectly, over this vast network, according to an exacting 2011 study. Goldman Sachs is ranked as the 18th most powerful institution in the world on that very small core list. Trump's global empire is not ranked—a minnow compared to a vampire squid...

**The People vs. Goldman Sachs: Why Top Execs Should Stand Trial**

A Senate committee has laid out the evidence. Now the Justice Department should bring criminal charges

==

http://www.rollingstone.com/politics/features/the-vampire-squid-occupies-trumps-white-house-w456225

Back on February 19th, during a primary-season speech in Myrtle Beach, South Carolina, Donald Trump directed a two-pronged rhetorical offensive against opponents in both parties. He started with Ted Cruz.

"I know the guys at Goldman Sachs. They have total, total control over [Cruz]," Trump said. "Just like they have total control over Hillary Clinton."Cruz's campaign, Trump pointed out, had taken loans from the infamous investment bank Goldman Sachs. And he'd failed to properly disclose one of these loans.

Trump demonized the bank enough that it almost seemed like genuine animosity existed between candidate and squid. When Goldman announced in September that it was banning employees from donating to Trump's campaign, it seemed official.

In October, Trump was even more specific in pointing the finger at Goldman. Referencing speeches Clinton gave to Goldman, Trump said that "Hillary Clinton meets in secret with international banks to plot the destruction of U.S. sovereignty in order to enrich these global financial powers, her special interest friends and her donors."

Trump's tales sounded like classic Rothschild/Bilderberg conspiracy lore. They would have been absurd, were it not for the fact that so much of the innuendo around Goldman Sachs often turns out to be true.

The bank has an extraordinary history of placing its executives in high-ranking governmental and quasi-governmental positions, from treasury secretaries to senators to the heads of the World and European Central Banks. Goldman has been implicated in the trafficking of toxic mortgages, a sprawling state corruption case in Malaysia, the manipulation of world commodity prices and a heinous episode involving Greece in which the bank helped to mask the country's ballooning debt while simultaneously working with JPMorgan Chase to create an index for betting against Greece's economy.

Nonetheless, Trump's insinuations about a Goldman-Hillary secret conspiracy were so pointed that CEO Lloyd Blankfein was forced to respond.

"If there's some secret international cabal, I've been left out of the party again," he quipped.

In his final pitch to voters in the days before the election, Trump used the image of Blankfein in to argue that insiders had ruined the lives of ordinary Americans to enrich themselves. Here is the narration you heard when Blankfein's face came on screen:

"It's a global power structure that is responsible for the economic decisions that have robbed our working class, stripped our country of its wealth and put that money into the pockets of a handful of large corporations and political entities."

Trump at an August campaign rally in Fort Lauderdale, Florida. Joe Raedle/Getty img]

One surprise election result and a mountain of jubilant #draintheswamp hashtags later, Donald Trump has filled his White House with, you guessed it, Goldman veterans.

His chief strategist, the unabashed white-supremacist loon Steve Bannon, is a former Goldman banker, as is adviser Anthony Scaramucci. Steve Mnuchin marks the fourth Goldman-pedigreed treasury secretary in the last four presidencies, after Bob Rubin, Lawrence Summers and Hank Paulson.

But the real shocker is the recent appointment of Goldman Chief Operating Officer Gary Cohn to the post of director of the National Economic Council. Bannon and Mnuchin were former, past Goldmanites. Cohn, meanwhile, is undoubtedly at least the number-two figure at the world's most despised bank, if not the outright co-head with Blankfein. He has been at the center of many of its most infamous episodes, including the Greek affair.

So much for draining the swamp.

The new party line, emanating both from Washington and from Alt-Right yahoos on the Internet, is that people like Gary Cohn are no longer the swindling scum-lords Trump said they were a few months ago, but simply smart businessmen.

As Trump put it, "Gary Cohn is going to put his talents as a highly successful businessman to work for the American people."

This mantra is often used to explain Goldman's legend. Its advocates say they may be cold-blooded, but they're just dern good at what they do.

The bank has worked very hard to nurture exactly that image, particularly when there are darker explanations for the bank's success that they would rather leave unexplored. A great example involves Cohn, Trump's new "top economic adviser."

Way back in November of 2007, a tidal wave was beginning to devour Wall Street. The subprime mortgage market was collapsing, and the bulk of America's investment banks were foundering.

Indeed, within a year, three of the country's storied top five investment banks – Bear Stearns, Merrill Lynch and Lehman Brothers – would be wiped out by the crisis, thanks mainly to their overinvestment in subprime.

One bank stood out as an exception: Goldman Sachs.

The legend on the street was that Goldman was somehow not only going to survive the crash, but prosper and make big profits. How did Goldman do so well during a financial hurricane? The New York Times had an answer: its leaders were smart – and humble!

"Goldman's secret sauce, say executives, analysts and historians," the paper wrote, "is high-octane business acumen, tempered with paranoia and institutionally encouraged — though not always observed — humility."

Where did writers Jenny Anderson and Landon Thomas Jr. get the idea that Goldman's smarts saved them during the mortgage crisis? From Goldman, of course.

We know this because of an investigation conducted into the bank's a-little-too-miraculous performance that year by the Senate Permanent Subcommittee on Investigations.

Chaired by Michigan Sen. Carl Levin, the PSI scrupulously detailed the efforts by Goldman to get out from under the mortgage crash by dumping its disastrous mortgage investments on its own clients as it simultaneously bet against them.

This maneuver, colloquially described since as the "Big Short" episode, was perhaps the most lurid example of Wall Street iniquity during the crash years. And Trump's new economic adviser, Cohn, played a central role.

Michigan Senator Carl Levin. Mark Wilson/Getty

In the run-up to the "Big Short" story – in the years leading up to 2007 – Goldman had joined other banks in helping cause the financial crisis. They'd done so by creating masses of toxic mortgage instruments and selling them to unsuspecting investors, who were (often falsely) told the loans met underwriting standards. Goldman, like JPMorgan Chase, Bank of America and Citigroup, would later pay billions to settle claims by its infuriated customers, which included state and federal housing authorities.

At the tail end of 2006, Goldman execs saw that a) the subprime mortgage market was in serious trouble, and b) the bank itself was dangerously overinvested in it. So they made a frenzied, often deceptive effort to induce their clients to eat what should naturally have been their own losses.

On December 14th, 2006, mortgage chief Daniel Sparks proposed: "Distribute as much as possible on bonds created from new loan securitizations and clean previous positions."

Translation: Let's create new mortgage-backed products to dump on others, and use them to "clean" our toxic portfolio.

In one mortgage-based deal called Hudson 1 securities, Goldman helped sell its toxic holdings by saying the bank's interests were "aligned" with those of potential clients, because it would own a tiny, $6 million slice of the deal.

The bank left out the fact that it had a $2 billion bet against the same deal.

In the same deal, Goldman told clients that the mortgage products in Hudson had been "sourced from the Street," i.e., that this stuff did not come from Goldman's own inventory. When Senate investigators later pressed Goldman executives on this question, they hilariously claimed this wasn't a lie, because Goldman was part of "the Street."

"They were like, 'We are the Street,'" one investigator told me, laughing.

Through deals like this, Goldman within months went from having a $6 billion bet on mortgages to having a $10 billion bet against them – a "big short."

All of these moves were made with the assent of the Firmwide Risk Committee, which included Goldman CFO David Viniar, Blankfein and Cohn.

They would go on to fleece other clients. In the summer, an Australian hedge fund called Basis Capital was induced to buy $100 million of a mortgage-based Goldman deal called "Timberwolf." They told the Aussies to expect a return of "over 60 percent."

Meanwhile, in private, Goldman execs were saying things like, "Boy, that timberwof [sic] was one shitty deal."

The sales rep who got Basis to buy was so elated that the subject line of his email read "Utopia." He told other execs he'd found the ultimate sucker. "I found white elephant, flying pig and unicorn all at once," he crowed.

Basis Capital later claimed it lost $56 million in six weeks. It filed for bankruptcy within months of the Timberwolf deal.

Getting back to the Times story about how Goldman's smarts and humility saved them during the crash: One of the documents the Senate investigators discovered was an email from Goldman press flack Lucas van Praag to a group of senior Goldman executives that included Blankfein, Cohn and Viniar.

Van Praag wanted to warn the leadership that there was a Times piece coming that would examine why Goldman managed to prosper at a time when everyone else was being wiped out. Van Praag did not, of course, tell The Times that Goldman had survived by making sure that its clientele bought up what Blankfein called the "cats and dogs" of its toxic inventory.

What van Praag instead said was more Trumpian: that Goldman just had a winning culture.

"We spent a lot of time on culture as a differentiator," van Praag told his bosses, when describing his interactions with apparently gullible reporter Jenny Anderson. "She was receptive."

In response to van Praag's email, Blankfein wrote, "Of course we didn't dodge the mortgage mess. We lost money, then made more than we lost because of shorts."

This is the same Lloyd Blankfein who testified years later in the Senate: "We were not consistently or significantly net-short the market in residential mortgage-related products in 2007 and 2008."

He added, "We didn't have a massive short against the housing market, and we certainly did not bet against our clients."

When Sen. Levin heard Blankfein say he didn't have a "massive short" during 2007, he was furious. "Heck, yes, I was offended," he told Rolling Stone. "Goldman's CEO claimed the firm 'didn't have a massive short,' when the opposite was true."

We know the "opposite was true" because of the extensive email record these arrogant yutzes left behind. One of the smoking guns involved Cohn. On July 25, 2007, Viniar sent Cohn an email pointing out the huge losses and writedowns that other banks were experiencing.

"Tells you what might be happening to people who don't have the big short," Viniar told Cohn.

img doc]

In the heat of the meltdown, there was some gallows humor between Cohn and Blankfein. At one point the two men seemed to be trying to figure out where they were with their mortgage strategy, and what to do going forward. "We are marking both sides," Cohn says. "There is a net short."

"Bet all the dads at camp are talking about the same stuff," Blankfein joked.

Goldman's higher-ups ended up having a great year. While the whole financial world was collapsing due in large part to behaviors like that of his own bank, Blankfein made $68.5 million, a record for a Wall Street executive. Cohn made $67.5 million. The two were the McGwire and Sosa of the profiting-off-others'-misery era. The bank, meanwhile, would lay off 3,200 lower-level employees within a year.

Goldman probably should have gone out of business in 2007-2008. Two little-discussed acts of government welfare in September of 2008 helped save the company.

First, there was the infamous emergency granting of Commercial Bank Holding Company status to Goldman. Have you ever seen a Goldman branch or a Goldman ATM? Probably not, because it isn't a commercial bank. But on September 21st, 2008, the government gave it permission to call itself one.

This move, so desperately needed that it was executed on a Sunday night, allowed Goldman access to mountains of life-saving cash from the Federal Reserve.

The other key move was a decision by the SEC to ban short-selling of financial stocks. This nakedly anticapitalist maneuver allowed Goldman to fend off attacks by speculators who correctly sensed the company was in deep trouble.

Apart from the SEC order, major shareholders like pension funds in New York and California also agreed to stop lending shares of Goldman and Morgan Stanley to short-sellers, essentially protecting these two banks in particular from the forces of the market. Notably, they were the two top-five investment banks that survived 2008.

Blankfein was initially opposed – "I'm for markets," he reportedly said – but as things worsened, he agreed with Morgan Stanley chief John Mack that they needed their government Daddy to save them.

"You're right. We have to do something about this," he said. He later called the decision "tricky."

Yet even with the SEC ban on short-selling, Goldman's stock price continued to plunge, from $207.78 in February 2008 to $47.41 in November. Cohn claims not to have been worried. "It wasn't scary at all," he said.

Vanity Fair found a colleague who scoffed at Cohn's assessment. "Complete and utter nonsense," the person said. For all their brains and humility, these geniuses needed the government to halt the free market on their behalf to survive.

Goldman deserves its villainous reputation. The bank symbolizes all the worst aspects of the modern "financialized" economy. The crash era was the ultimate example.

Banks like Goldman mostly didn't create anything of value during this time. Mostly what they did was engineer new ways to create credit that led to millions of people buying homes they couldn't afford, creating the mother of all financial bubbles.

When it all went bust, as it necessarily had to, they scrambled by hook or crook to dump the damage on other people. Clients ate their losses and they ran weeping to the taxpayer for rescue – Goldman got $12.9 billion alone just from the AIG bailout, which of course was engineered by former Goldman chief Hank Paulson. In the middle of all of this, people like Blankfein and Cohn paid themselves record amounts of compensation. They are scum, and it's absolutely fitting that so many of them will end up serving the Trump administration.

Donald Trump made a lot of political hay out of the iniquity of people like Cohn during his campaign. But his recent appointments are absolute proof that his "populist" message was a crock all along – not that we couldn't have guessed anyway.

==

GS beat up OTS, --> AIG Indybank fails

wiki

OTS:

AIG

The OTS was pressed by the Senate Banking Committee to admit partial blame for the failure of American International Group (AIG).^[30] In a congressional hearing, after Donald Kohn described how there was no regulator for AIG Financial Products or the company overall, Scott Polakoff interrupted.^[31][32] Polakoff stated that it was time for the OTS to take some responsibility because they had been "deemed an acceptable regulator for both US domestic and international operations".^[33]

Due to OTS regulation of AIG, the Mayfair-based (London, UK) AIG Financial Products division was not subject to Financial Services Authority regulation.^[34] OTS regulation allowed France's Commission Bancaire to grant approval for a Paris-based banking subsidiary, Banque AIG. The Mayfair-based AIG Financial Products division then opened under a system which allowed branch openings in member countries after one EU regulator's approval.

That OTS was the primary regulator of AIG has been described as "nonsense"^[35] and compared to "the super-heavyweight of the world going up against the 65 lb, 13-year-old, class weakling".^[36] AIG operates in 130 countries.^[37] The OTS had a small division that monitored derivatives including the credit default swaps at AIG.^[38]After a dispute with Goldman Sachs in 2007 over the value of the credit default swaps,^[39] the OTS did not initiate formal enforcement action, but "periodically raised concerns with AIG managers".^[38] Other sources of concern were the three credit rating agencies and AIG's auditor PricewaterhouseCoopers.^[39] In March 2008, after AIG disclosed valuation problems, the OTS sent a letter to AIG requesting a "corrective action plan" in 30 days.^[38] The division overseeing AIG Financial Products was "quietly disbanded" and AIG missed their deadline.^[38]

==

matt t

http://www.rollingstone.com/politics/features/trump-pick-jay-clayton-to-be-most-conflicted-sec-chair-ever-w459289

...

sherrod brown:

It's hard to see," Brown said, "how an attorney who's spent his career helping Wall Street beat the rap will keep President-elect Trump's promise to stop big banks and hedge funds from 'getting away with murder.'"

Most of the consternation over Clayton's appointment has to do with his own background as a longtime defender of big banks. He's been involved in some infamously shadowy episodes in the post-crisis era, with two in particular standing out.

He represented Goldman Sachs when the firm received a $5 billion capital infusion from Warren Buffet during the September 2008 meltdown. He also represented Barclays during its malodorous acquisition of the assets of Lehman Brothers, an episode one lawyer described to me years ago as "the greatest bank robbery you never heard of." (There is a chapter about this story in my last book, The Divide.)

That Clayton has been a devoted legal slave to the usual Wall Street monsters over the years is obviously concerning, though not terribly unusual.

What makes this situation somewhat unique is the fact that this incoming SEC chief is also married to a broker at Goldman Sachs – his wife Gretchen is a wealth management advisor. This means that a significant portion of Clayton's family income while in office will presumably be coming from a company he is charged with policing.

This is both far less common and a much bigger problem than you'd think. As one former congressional aide put it to me today, "Clayton will be the most financially conflicted SEC chairman in history."

Remember, at the Republican convention last year, Trump supporters heckled Ted Cruz's wife, Heidi, for being a Goldman Sachs employee.

Where are all those furious Trump supporters now that their idol has put the husband of a Goldman broker in charge of the SEC? Pretty quiet. You can hear the crickets chirping all across America today.

How much of an ethical problem Clayton's marriage is can be seen in a bizarre contradiction in the rules. As SEC chairman, Clayton going forward will have to recuse himself from any enforcement decision involving Goldman. This is no small thing, since Goldman has not exactly been a stranger to SEC enforcement decisions over the years.

Yet even as he has to sit out Goldman's inevitable enforcement problems because of his wife, Clayton will not have to recuse himself from rulemaking decisions that could affect Goldman far more than isolated corruption cases.

Ethics rules say officials like Clayton do not have to recuse themselves from matters of "general application," meaning in this case that Clayton may rule on matters concerning Goldman, provided they also impact other banks.

But these decisions about things like the Volcker rule or fixed-income transparency or swaps could have a profound impact on Goldman's bottom line, with hundreds of millions, or even billions, of dollars at stake.

Who knows how much this will or even could affect his wife's personal compensation. Industry lawyers I spoke with today seemed split on how big a deal it is. But all agreed that it's not a good look for Clayton.

"I get the feeling that this Trump crew doesn't particularly care how bad things look, though," said one.

Obviously there have been many previous instances of familial conflicts involving government officials. Even the outgoing SEC chief, Mary Jo White, was criticized for conflicts involving her husband, John White, a partner at the white-shoe firm Cravath, Swaine & Moore.

Trump's pick for Transportation secretary, Elaine Chao, is the daughter of the owner of a major shipping company, which poses obvious problems. Former Sen. Tom Daschle's marriage to a lobbyist was a source of consternation for ethics watchdogs for years. There are other examples. The Beltway typically yawns at these situations.

"In general, Washington has kind of a professional courtesy among the corrupted to not take romantic partner conflicts seriously," says Jeff Hauser, director of the Revolving Door Project. "It's a major issue."

Goldman Sachs isn't just a frequent flyer when it comes to SEC enforcement fiascoes. The bank is also a regular applicant – and recipient – of SEC waivers exempting it from the automatic penalties and sanctions that would otherwise be triggered by their offenses.

Even if Clayton sits out these decisions, the situation is ridiculous. Who needs an SEC chief who has to stay on the sidelines for some of the most important cases the agency considers? It's like having a police commissioner who has to cover his ears every time someone mentions the Crips or the Latin Kings.

A year ago at this time, Donald Trump was ridiculing Ted Cruz for being a "puppet" of Goldman. Now Clayton joins senior advisor Steve Bannon, Treasury appointee Steve Mnuchin, NEC director Gary Cohn and White House advisor Anthony Scaramucci as high-ranking Trump appointees who are either from Goldman or married to someone at the firm. What a joke.

==

https://www.propublica.org/article/why-havent-bankers-been-punished-just-read-these-insider-sec-emails

story was co-published with The New Yorker. 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 “devasting [sic] impact 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.

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....